FKLI - The Rebound Is Fast Fizzling Out-  1/5/2015

 

The technical rebound fast fizzling out as price stopped gaining on the last 2 trading days of 2014 and began to fall on the 1st. trading day of the new year. Since the Stochastic has already gone into the overbought zone, I would think taking profit as a logical choice. The MACD remains positive but as it is still way below the zero signal line, so there is nothing to shout about it. The DMI stays negative with the D- spiking up again and the D- falling. This means the sellers are getting back into the game with the buyers quitting swiftly.


 

At the weekly chart, price went tested but failed to close above the bottom band. The Stochastic managed to stay positive. The MACD remains negative. These 2 indicators are contradicting each other, so there may be an early sign that the market decides to go sideway next. The DMI stays negative with the D- continues to fall which means the sellers are still leaving. But the D+ has gone flat , this means the buyers have begun to hesitate after the past 2 weeks advances. and the ADX has also turned flat, this is coinciding with the 2 contradicting indicators mentioned earlier, a sign of listless market to come ?


 

The monthly chart has completely fallen over to the bear camp as price has closed below the bottom band at last month end. This is the first time price has closed below the bottom band since July, 2008. The Stochastic has fallen below its 80's signal line. The MACD is negative and falling downward towards the zero signal line. Please take note the bearish divergence that has completed formed at both the Stochastic and MACD. Divergences formed at the longer time parameter is even more important than those formed at the daily chart as they usually mean the end of a major cycle. So this means that the bull cycle of FKLI may has finally came to an end and a beginning of a major bear cycle. The DMI is negative and another item to watch out for is the ADX which has begun to rise. If it can continues to rise further, it may mean the selling may get more intense.

This is merely a technical rebound in a grossly oversold market, so there is little to hope for the bull's return. So from here we may see another new round of selling to come back or as indicated by the weekly chart, a period of listlessness first before something big comes.